<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED MARCH 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION FILE NUMBER 1-286-2
FOSTER WHEELER CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 13-1855904
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Perryville Corporate Park, Clinton, N. J. 08809-4000
----------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 730-4000
--------------
(Not Applicable)
- ---------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of March 28, 1997 was 40,642,237 shares.
<PAGE> 2
FOSTER WHEELER CORPORATION
INDEX
Page No.
--------
Part I Financial Information:
Item 1 - Financial Statements:
Condensed Consolidated Balance Sheet at
March 28, 1997 and December 27, 1996 2
Condensed Consolidated Statement of Earnings
Three Months Ended March 28, 1997 and
March 29, 1996 3
Condensed Consolidated Statement of Cash Flows
Three Months Ended March 28, 1997 and
March 29, 1996 4
Notes to Condensed Consolidated Financial
Statements 5 - 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 10
Part II Other Information:
Item 4 - Submission of Matters to a Vote of
Security Holders 11
Item 6 - Exhibits and Reports on Form 8-K 12
- 1 -
<PAGE> 3
PART I. FINANCIAL INFORMATION
-----------------------------
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
ITEM 1. - FINANCIAL STATEMENTS
- ------- --------------------
CONDENSED CONSOLIDATED BALANCE SHEET
------------------------------------
(IN THOUSANDS OF DOLLARS)
-------------------------
<TABLE>
<CAPTION>
ASSETS March 28, 1997 December 27,
- ------ (Unaudited) 1996
-------------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 210,862 $ 267,149
Short-term investments 161,246 137,180
Accounts and notes receivable 932,331 885,785
Contracts in process 358,761 363,716
Inventories 36,570 39,799
Prepaid and refundable income taxes 38,245 38,627
Prepaid expenses 30,853 30,192
----------- -----------
Total Current Assets 1,768,868 1,762,448
----------- -----------
Land, buildings and equipment 1,073,447 1,054,786
Less accumulated depreciation 335,374 330,007
----------- -----------
Net book value 738,073 724,779
----------- -----------
Notes and accounts receivable - long-term 76,856 74,296
Investments and advances 76,602 73,725
Intangible assets - net 328,541 331,463
Prepaid pension costs and benefits 178,082 180,473
Other, including insurance recoveries 360,102 359,362
Deferred income taxes 11,551 3,788
----------- -----------
Total Assets $ 3,538,675 $ 3,510,334
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Current installments on long-term debt $ 32,656 $ 32,764
Bank loans 56,901 52,278
Accounts payable and accrued expenses 564,066 635,030
Estimated cost to complete long-term contracts 599,818 562,984
Advance payments by customers 93,461 116,903
Income taxes 46,541 41,935
----------- -----------
Total Current Liabilities 1,393,443 1,441,894
Special-purpose project debt 456,851 379,284
Other long-term debt 447,302 416,995
Postretirement and other employee benefits
other than pensions 176,709 180,210
Other long-term liabilities, deferred credits and
minority interest in subsidiary companies 358,891 372,898
Deferred income taxes 29,201 30,095
----------- -----------
Total Liabilities 2,862,397 2,821,376
----------- -----------
Stockholders' Equity:
Common stock 40,653 40,651
Paid-in capital 198,022 197,970
Retained earnings 483,070 471,177
Accumulated translation adjustment (45,172) (20,545)
----------- -----------
676,573 689,253
Less cost of treasury stock (295) (295)
----------- -----------
Total Stockholders' Equity 676,278 688,958
----------- -----------
Total Liabilities and Stockholders' Equity $ 3,538,675 $ 3,510,334
=========== ===========
</TABLE>
See notes to financial statements.
- 2 -
<PAGE> 4
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
--------------------------------------------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
---------------------------------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
March 28, 1997 March 29, 1996
-------------- --------------
<S> <C> <C>
Revenues:
Operating revenues $ 965,114 $ 843,916
Other income 13,365 10,507
----------- -----------
Total revenues 978,479 854,423
----------- -----------
Cost and expenses:
Cost of operating revenues 854,515 726,642
Selling, general and administrative expenses 70,917 72,622
Other deductions/minority interest 19,686 19,452
----------- -----------
Total costs and expenses 945,118 818,716
----------- -----------
Earnings before income taxes 33,361 35,707
Provision for income taxes 13,140 12,271
----------- -----------
Net earnings $ 20,221 $ 23,436
=========== ===========
Weighted average number of common
shares outstanding 40,641,512 40,512,674
=========== ===========
Earnings per share $ .50 $ .58
=========== ===========
Cash dividends paid per common share $ .205 $ .195
=========== ===========
</TABLE>
See notes to financial statements.
- 3 -
<PAGE> 5
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
----------------------------------------------
(IN THOUSANDS OF DOLLARS)
-------------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
March 28, 1997 March 29, 1996
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 20,221 $ 23,436
Adjustments to reconcile net earnings
to cash flows from operating activities:
Depreciation and amortization 15,707 16,127
Noncurrent deferred tax (7,252) 4,701
Other (1,444) (1,548)
Changes in assets and liabilities, net of acquisitions:
Receivables (90,964) 32,260
Contracts in process and inventories (751) 3,232
Accounts payable and accrued expenses (43,103) (39,789)
Estimated cost to complete long-term contracts 58,894 (42,375)
Advance payments by customers (18,186) 31,875
Income taxes 5,570 5,894
Other assets and liabilities (15,203) (2,108)
--------- ---------
NET CASH (USED)/PROVIDED BY OPERATING ACTIVITIES (76,511) 31,705
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (33,314) (43,784)
Proceeds from sale of properties 349 306
Increase in investments and advances (4,201) (430)
(Increase)/decrease in short-term investments (32,479) (22,032)
Partnership distributions (4,800) (4,859)
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES (74,445) (70,799)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends to stockholders (8,328) (7,893)
Proceeds from exercise of stock options 53 1,705
Increase in short-term debt 7,736 7,611
Proceeds from long-term debt 110,952 98,302
Repayment of long-term debt (2,543) (19,860)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 107,870 79,865
Effect of exchange rate changes on cash and cash equivalents (13,201) (2,233)
--------- ---------
(DECREASE)/ INCREASE IN CASH AND CASH EQUIVALENTS (56,287) 38,538
Cash and cash equivalents at beginning of year 267,149 167,131
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 210,862 $ 205,669
========= =========
Cash paid during period:
-Interest (net of amount capitalized) $ 2,580 $ 5,880
-Income taxes $ 2,268 $ 2,392
</TABLE>
See notes to financial statements.
- 4 -
<PAGE> 6
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
---------------------------------------------------
(UNAUDITED)
-----------
1. The condensed consolidated balance sheet as of March 28, 1997, and the
related condensed consolidated statements of earnings and cash flows for the
three month periods ended March 28, 1997 and March 29, 1996 are unaudited.
In the opinion of management, all adjustments necessary for a fair
presentation of such financial statements have been included. Such
adjustments only consisted of normal recurring items. Interim results are
not necessarily indicative of results for a full year.
The financial statements and notes are presented in accordance with Form
10-Q and do not contain certain information included in Foster Wheeler
Corporation's Annual Report on Form 10-K for the fiscal year ended December
27, 1996 filed with the Securities and Exchange Commission March 21, 1997,
which should be read in conjunction with this report.
In conformity with generally accepted accounting principles, management must
make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expense during the reporting period. Actual results could differ from those
estimates.
2. In the ordinary course of business, the Corporation and its subsidiaries
enter into contracts providing for assessment of damages for nonperformance
or delays in completion. Suits and claims have been or may be brought
against the Corporation by customers alleging deficiencies in either
equipment design or plant construction. Based on its knowledge of the facts
and circumstances relating to the Corporation's liabilities, if any, and to
its insurance coverage, Management of the Corporation believes that the
disposition of such suits will not result in charges against assets or
earnings materially in excess of amounts previously provided in the
accounts.
The Corporation and its subsidiaries, along with many other companies, are
codefendants in numerous lawsuits pending in the United States. Plaintiffs
claim damages for personal injury alleged to have arisen from the exposure
to or use of asbestos in connection with work performed by the Corporation
and its subsidiaries during the 1970's and prior. At March 28, 1997, there
were approximately 95,700 claims pending. Approximately 6,600 new claims
were filed in 1997 and approximately 3,500 were either settled or dismissed
without payment. Any settlement costs not covered by the Corporation's
insurance carriers were immaterial. The Corporation has agreements with
insurance carriers covering a substantial portion of the potential cost
relating to these exposures. The Corporation has recorded, with respect to
asbestos litigation, an asset relating to probable insurance recoveries and
a liability relating to probable losses. These assets and liabilities were
estimated based on historical data developed in conjunction with outside
experts. Management of the Corporation has carefully considered the
financial viability and legal obligations of its insurance carriers and has
concluded that except for those insurers that have become or may become
insolvent, the insurers will continue to adequately fund claims and defense
costs relating to asbestos litigation.
- 5 -
<PAGE> 7
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
---------------------------------------------------
(UNAUDITED)
-----------
(Continued)
-----------
3. The Corporation maintains two revolving credit agreements with a syndicate of
banks. One is a short-term revolving credit agreement of $100,000 with a
maturity of 364 days and the second is a $300,000 revolving credit agreement
with a maturity of four years (collectively, the "Revolving Credit
Agreements"). The Revolving Credit Agreements contain two financial
covenants. The first covenant is that the Consolidated Fixed Charges Coverage
Ratio (as defined in the Revolving Credit Agreements) shall be greater than
2.5:1 for each period of four consecutive fiscal quarters. The Consolidated
Fixed Charges Coverage Ratio for the period ending March 28, 1997 was 2.81:1.
The Revolving Credit Agreements also require that the Consolidated Leverage
Ratio, as defined therein, not exceed 0.5:1. As of March 28, 1997, the ratio
was 0.49:1.
4. A total of 2,404,346 shares were reserved for issuance under the stock option
plans; of this total 933,416 were not under option.
5. Foster Wheeler Corporation had a backlog of firm orders as of March 28, 1997
of $7,139,495 as compared to a backlog as of March 29, 1996 of $6,534,120.
6. Earnings per share data have been computed on the weighted average number of
shares of common stock outstanding. Outstanding stock options have been
disregarded because their effect on earnings per share would not be
significant.
7. Interest income and cost for the following periods are:
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 28, 1997 March 29, 1996
-------------- --------------
<S> <C> <C>
Interest income $ 5,386 $ 5,214
======== ========
Interest cost $ 15,364 $ 13,802
======== ========
</TABLE>
Included in interest cost is interest capitalized on self-constructed assets,
which was $1,841 and $70 for the quarters ended March 28,1997 and March 29,1996,
respectively.
- 6 -
<PAGE> 8
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
ITEM 2.- MANAGEMENT'S DISCUSSION AND ANALYSIS
- ------- ------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
------------------------------------------------------------
The following is Management's Discussion and Analysis of certain significant
factors that have affected the financial condition and results of operations of
the Corporation for the periods indicated below. This discussion and analysis
should be read in conjunction with the 1996 Annual Report on Form 10-K filed
March 21, 1997.
RESULTS OF OPERATIONS
Three months ended March 28, 1997 compared to three months ended March 29, 1996
- -------------------------------------------------------------------------------
The Corporation's consolidated backlog at March 28, 1997 totaled $7,139.5
million, the highest in the history of the Corporation. This represented an
increase of $605.4 million or 9% over the amount reported as of March 29, 1996.
The dollar amount of backlog is not necessarily indicative of the future
earnings of the Corporation related to the performance of such work. Although
backlog represents only business which is considered firm, cancellations or
scope adjustments may occur. Due to factors outside the Corporation's control,
such as changes in project schedules, the Corporation cannot predict with
certainty the portion of backlog not to be performed. Backlog has been adjusted
to reflect project cancellations, deferrals, and revised project scope and cost.
The net reduction in backlog from project adjustments and cancellations for the
three months ended March 28, 1997 was $17.4 million, compared with $390.0
million for the three months ended March 29, 1996. Furthermore, the
Corporation's future award prospects include several large scale international
projects and, because the large size and uncertain timing can create variability
in the Corporation's contract awards, future award trends are difficult to
predict with certainty.
The Engineering and Construction Group ("E & C Group"), had a backlog of
$4,998.0 million at March 28, 1997, which represented a 7% increase from March
29, 1996 due primarily to orders awarded to the United Kingdom subsidiary. The
Energy Equipment Group had backlog of $1,728.7 million at March 28, 1997, which
represented a 9% increase from backlog at March 29, 1996 due primarily to orders
awarded to the North American and Finnish subsidiaries.
New orders awarded for the three months ended March 28, 1997 of $1,220.7 million
were 14% lower than new orders awarded for the three months ended March 29, 1996
of $1,417.4 million. Approximately 74% of new orders in the three months ended
March 28, 1997 were for projects awarded to the Corporation's subsidiaries
located outside the United States. Key geographic regions contributing to new
orders awarded for the three months ended March 28, 1997 were Southeast Asia,
Europe, the Middle East and China. In 1996, new orders awarded to Foster Wheeler
USA Corporation in the E & C Group were approximately $137 million higher than
in 1997.
-7-
<PAGE> 9
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
ITEM 2.- MANAGEMENT'S DISCUSSION AND ANALYSIS
- ------- ------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
------------------------------------------------------------
(CONTINUED)
-----------
Operating revenues increased in the three months ended March 28, 1997 by $121.2
million compared to the three months ended March 29, 1996 to $965.1 million from
$843.9 million. The E & C Group was primarily responsible for the increase in
operating revenues, accounting for $147.5 million of this increase, of which
$51.5 million was related to the Italian affiliate, $48.7 was due to increases
in the affiliates in the United States and $16.6 million was related to the
Spanish affiliate. The increase in the E & C Group's operating revenues was
partially offset by a decrease in the Energy Equipment Group of approximately
$26.8 million, primarily attributed to operations of the North American
affiliates.
Gross earnings declined $6.7 million to $110.6 million from $117.3 million or 6%
in the three months ended March 28, 1997 as compared with the three months ended
March 29, 1996. The Energy Equipment Group was responsible for approximately
$10.8 million of the decrease in gross earnings, while the E & C Group reported
an increase of $6.2 million in gross earnings.
Selling, general and administrative expenses decreased 2% in the three months
ended March 28, 1997 as compared with the same period in 1996, from $72.6
million to $70.9 million. Other income in the three months ended March 28, 1997
as compared with March 29, 1996 increased to $13.4 million from $10.5 million.
Approximately 40% of other income in the three months ended March 28, 1997 was
interest income, compared to 50% for the three months ended March 29, 1996.
Other deductions in the three months ended March 28, 1997, of $18.2 million,
were slightly higher than that reported in the three months ended March 29,
1996.
The effective tax rate of 39% exceeds the U.S. statutory rate primarily due to
state taxes and the impact of foreign earnings.
Net earnings decreased by $3.2 million or 14% to $20.2 million for the three
months ended March 28, 1997 as compared to the same period in 1996. The E & C
Group reported increased net earnings of $2.2 million primarily due to improved
results in the United Kingdom. This increase was offset by reduced earnings in
the Energy Equipment Group of $3.1 million and in the Power Systems Group of
$1.4 million.
FINANCIAL CONDITION
The Corporation's consolidated financial condition slightly declined during the
three months ended March 28, 1997 as compared to December 27, 1996.
Stockholders' equity for the three months ended March 28, 1997 decreased $12.7
million, primarily due to the significant fluctuation in the accumulated
translation adjustment.
During the three months ended March 28, 1997, the Corporation's long-term
investments in land, buildings and equipment were $33.3 million as compared with
$43.8 million for the comparable period in 1996. Approximately $26.1 million was
invested by the Power Systems Group in build, own and operate projects during
the first three months of 1997. During the next few years, capital expenditures
will continue to be directed primarily toward strengthening and supporting the
Corporation's core businesses.
- 8 -
<PAGE> 10
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
ITEM 2.- MANAGEMENT'S DISCUSSION AND ANALYSIS
- ------- ------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
------------------------------------------------------------
(CONTINUED)
-----------
Since December 27, 1996, long-term debt, including current installments, and
bank loans increased by $116.1 million, net of repayments of $2.5 million,
primarily due to borrowings to fund the investments in build, own and operate
projects and to fund current working capital requirements.
In the ordinary course of business, the Corporation and its subsidiaries enter
into contracts providing for assessment of damages for nonperformance or delays
in completion. Suits and claims have been or may be brought against the
Corporation by customers alleging deficiencies in either equipment design or
plant construction. Based on its knowledge of the facts and circumstances
relating to the Corporation's liabilities, if any, and to its insurance
coverage, Management of the Corporation believes that the disposition of such
suits will not result in charges against assets or earnings materially in excess
of amounts previously provided in the accounts.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled $210.9 million at March 28, 1997, a decrease
of $56.3 million from fiscal year end 1996; however, short-term investments
increased by $24.1 million to $161.2 million. During the first three months of
fiscal 1997, the Corporation paid $8.3 million in dividends to stockholders and
repaid debt of $2.5 million. Cash used by operating activities amounted to $76.5
million. New borrowings totaled $118.7 million, resulting from investments by
the Power Systems Group in build, own and operate projects and requirements to
fund current working capital needs. In total, the Power Systems Group invested
approximately $26.1 million in the construction of waste-to-energy, cogeneration
and hydrogen plants.
Over the last several years working capital needs have increased as a result of
the Corporation satisfying its customers' requests for more favorable payment
terms under contracts. Such requests generally include reduced advance payments
and more favorable payment schedules. Such terms, which require the Corporation
to defer receipt of payments from its customers, have had a negative impact on
the Corporation's available working capital. The Management of the Corporation
expects its customers' requests for more favorable payment terms under the
Energy Equipment contracts to continue as a result of the competitive markets in
which the Corporation operates. The Corporation intends to satisfy its
continuing working capital needs by borrowing under its Revolving Credit
Agreements, through internal cash generation and third-party financings in the
capital markets. The Corporation's pricing of contracts recognizes costs
associated with the use of working capital.
- 9 -
<PAGE> 11
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
Item 2.- MANAGEMENT'S DISCUSSION AND ANALYSIS
- ------- ------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
------------------------------------------------------------
(CONTINUED)
-----------
The Corporation and its subsidiaries, along with many other companies, are
codefendants in numerous lawsuits pending in the United States. Plaintiffs claim
damages for personal injury alleged to have arisen from the exposure to or use
of asbestos in connection with work performed by the Corporation and its
subsidiaries during the 1970's and prior. At March 28, 1997, there were
approximately 95,700 claims pending. Approximately 6,600 new claims were filed
in 1997 and approximately 3,500 were either settled or dismissed without
payment. Any settlement costs not covered by the Corporation's insurance
carriers were immaterial. The Corporation has agreements with insurance carriers
covering a substantial portion of the potential cost relating to these
exposures. The Corporation has recorded, with respect to asbestos litigation, an
asset relating to probable insurance recoveries and a liability relating to
probable losses. These assets and liabilities were estimated based on historical
data developed in conjunction with outside experts. Management of the
Corporation has carefully considered the financial viability and legal
obligations of its insurance carriers and has concluded that except for those
insurers that have become or may become insolvent, the insurers will continue to
adequately fund claims and defense costs relating to asbestos litigation.
Management of the Corporation believes that cash and cash equivalents of $210.9
million and short-term investments of $161.2 million at March 28, 1997, combined
with cash flows from operating activities, amounts available under its Revolving
Credit Agreements and access to third-party financings in the capital markets
will be adequate to meet its working capital and liquidity needs for the
foreseeable future.
OTHER ACCOUNTING MATTERS
- ------------------------
Statement of Financial Accounting Standard No. 128 "Earnings per share" was
issued in February 1997. This statement establishes standards for computing and
presenting earnings per share (EPS). This Statement is effective for financial
statements issued for periods ending after December 15, 1997, including interim
periods; earlier application is not permitted. The Corporation is currently
calculating the impact of this Statement.
SAFE HARBOR STATEMENT
- ---------------------
This Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of the Form 10-Q contain forward-looking
statements that are based on Management's assumptions, expectations and
projections about the various industries within which the Corporation operates.
Such forward-looking statements by their nature involve a degree of risk and
uncertainty. The Corporation cautions that a variety of factors, including but
not limited to the following, could cause business conditions and results to
differ materially from what is contained in forward-looking statements: changes
in the rate of economic growth in the United States and other major
international economies, changes in investment by the energy, power and
environmental industries, changes in regulatory environment, changes in project
schedules, changes in trade, monetary and fiscal policies worldwide, currency
fluctuations, outcomes of pending and future litigation, protection and validity
of patents and other intellectual property rights and increasing competition by
foreign and domestic companies.
-10-
<PAGE> 12
PART II. OTHER INFORMATION
--------------------------
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
(a) Date of Meeting
---------------
The Annual Meeting of Stockholders of Foster Wheeler Corporation was
held on April 28, 1997, at the Hamilton Park Conference Center,
175 Park Avenue, Florham Park, New Jersey.
(b) Election of Directors
---------------------
Directors Elected For Withheld
----------------- --- --------
Martha Clark Goss 32,806,191 894,617
David J. Roberts 32,811,725 889,083
John E. Stuart 32,788,924 911,884
Charles Y.C. Tse 32,674,354 1,026,454
Other Directors continuing in office:
Eugene D. Atkinson Constance J. Horner
Louis E. Azzato Joseph J. Melone
David J. Farris Frank E. Perkins
E. James Ferland Richard J. Swift
(c) Additional Matters Voted Upon
-----------------------------
Approval to amend the Directors' Stock Option Plan so as to increase
the aggregate number of shares of Common Stock available for issuance
from 150,000 to 400,000 shares and increase the annual stock option
grant for non-employee Directors from 2,000 to 3,000 shares.
For 30,703,328
Against 2,602,945
Abstain 394,535
Broker Non-Votes -0-
Ratification of the selection of Coopers & Lybrand, L.L.P. as auditors
of the Corporation for 1997.
For 33,444,100
Against 175,308
Abstain 81,400
-11-
<PAGE> 13
PART II. OTHER INFORMATION
--------------------------
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
a) Exhibits
--------
Exhibit
Number Exhibit
------- -------
12-1 Statement of Computation of Consolidated Ratio of
Earnings to Fixed Charges and Combined Fixed
Charges and Preferred Share Dividend Requirements
27 Financial Data Schedule (For the informational
purposes of the Securities and Exchange Commission
only.)
b) Reports on Form 8-K
-------------------
None
-12-
<PAGE> 14
PART II. OTHER INFORMATION
--------------------------
FOSTER WHEELER CORPORATION AND SUBSIDIARIES
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FOSTER WHEELER CORPORATION
--------------------------
(Registrant)
Date: May 12, 1997 /S/ Richard J. Swift
----------------------- --------------------
Richard J. Swift
(Chairman, President and
Chief Executive Officer)
Date: May 12, 1997 /S/ David J. Roberts
------------------------ --------------------
David J. Roberts
(Vice Chairman and
Chief Financial Officer)
- 13 -
<PAGE> 15
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit Description
------- -------------------
12-1 Statement of Computation of Consolidated Ratio of
Earnings to Fixed Charges and Combined Fixed
Charges and Preferred Share Dividend Requirements
27 Financial Data Schedule (For the informational
purposes of the Securities and Exchange Commission
only.)
<PAGE> 1
EXHIBIT 12 - 1
FOSTER WHEELER CORPORATION
STATEMENT OF COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES AND
COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDEND REQUIREMENTS
($000'S)
UNAUDITED
<TABLE>
<CAPTION>
Fiscal Year
3 months -----------------------------------------------------------------
1997 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
- --------
Net Earnings/(Loss) $ 20,221 $ 82,240 $ 28,534 $ 65,410 $ 57,704 $ (45,755)
Taxes on Income 13,140 44,626 41,129 41,457 39,114 22,321
Cumulative Effect of Change in
Accounting Principle 91,259
Total Fixed Charges 20,256 74,002 60,920 45,412 43,371 46,365
Capitalized Interest (1,841) (6,362) (1,634) (467) (213) (1,739)
Capitalized Interest Amortized 632 2,528 2,273 2,189 2,180 2,111
Equity Earnings of non-consolidated
associated companies accounted for
by the equity method, net of Dividends (350) (1,474) (1,578) (623) (883) 771
--------- --------- --------- --------- --------- ---------
$ 52,058 $ 195,560 $ 129,644 $ 153,378 $ 141,273 $ 115,333
Fixed Charges:
- -------------
Interest Expense $ 13,523 $ 54,940 $ 49,011 $ 34,978 $ 33,558 $ 34,159
Capitalized Interest 1,841 6,362 1,634 467 213 1,739
Imputed Interest on non-capitalized
lease payments 4,892 12,700 10,275 9,967 9,600 10,467
--------- --------- --------- --------- --------- ---------
$ 20,256 $ 74,002 $ 60,920 $ 45,412 $ 43,371 $ 46,365
RATIO OF EARNINGS TO FIXED CHARGES 2.57 2.64 2.13 3.38 3.26 2.49
</TABLE>
*There were no preferred shares outstanding during any of the periods indicated
and therefore the consolidated ratio of earnings to fixed charges and combined
fixed charges and preferred share dividend requirements would have been the same
as the consolidated ratio of earnings to fixed charges and combined fixed
charges for each period indicated.
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary of financial information extracted from the
condensed consolidated balance sheet and statement of earnings for the 3 months
ended March 28, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-26-1997
<PERIOD-START> DEC-28-1996
<PERIOD-END> MAR-28-1997
<CASH> 210,862
<SECURITIES> 161,246
<RECEIVABLES> 932,331
<ALLOWANCES> 0
<INVENTORY> 395,331
<CURRENT-ASSETS> 1,768,868
<PP&E> 1,073,447
<DEPRECIATION> 335,374
<TOTAL-ASSETS> 3,538,675
<CURRENT-LIABILITIES> 1,393,443
<BONDS> 904,153
0
0
<COMMON> 40,653
<OTHER-SE> 635,625
<TOTAL-LIABILITY-AND-EQUITY> 3,538,675
<SALES> 965,114
<TOTAL-REVENUES> 978,479
<CGS> 925,432
<TOTAL-COSTS> 925,432
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,523
<INCOME-PRETAX> 33,361
<INCOME-TAX> 13,140
<INCOME-CONTINUING> 20,221
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,221
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.50
</TABLE>
